Despite facing a 7.5% decline in net profit in the first half of its fiscal year compared to the year before, Fosters Group is set to activate its plans to demerge its beer unit, Carlton & United Breweries (CUB), from its wine division, Treasury Wine Estates (TWE).Depending on shareholder and court approvals in April, CUB Ð which is to change its name to Foster’s Ð and TWE will both list in May on the Australian Stock Exchange, with entirely separate boards and management teams. Eligible Foster’s shareholders will receive one share in TWE for every three Foster’s shares they own, while retaining their shareholding in Foster’s. Dealing with the same dire currency environment as all exporters of Australian wine, TWE reported a decline of 5.9% in sales volumes, but due to a focus on premium brands, a 0.7% increase in earnings before interest and taxes to $99.9m. TWE is expected to attract considerable interest from trade buyers and private equity firms after its May listing although Foster’s has already rejected a $2.5 billion offer for TWE. Some analysts believe that its recent ‘soft’ earnings will make the newly-floated wine division vulnerable. The TWE business currently has a $3.1 billion value on Foster’s books and behind Constellation Brands is the world’s second-largest wine producer.
